Amazon may beat Apple to become first $1 trillion company

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$1 trillion value
Apple is heading toward a $1 trillion market cap. But could Amazon get there first?
Photo: Pierre Marcel/Flickr CC

Apple’s market value will eventually top $1 trillion, but Amazon is evolving more and more as if it will get there first.

The gap has rapidly narrowed between the two company’s market values. Apple, always believed to be the first company to reach $1 trillion started out the year with stock valued 50 percent higher than Amazon’s.

That gap is now just 10 percent.

Amazon shares have climbed so fast ($260 billion this year), adding “the equivalent of Walmart’s total market cap in just six months,” Bloomberg’s Shira Ovide wrote in a story published this morning.

Just three years ago, Amazon wasn’t one of the top 40 most valuable companies. But that changed as its heavy spending to grow – from online retail to information technology (think Amazon Echo) and most recently, buying Whole Foods – has started paying off and stoking investor enthusiasm.

1 trillion value
Amazon’s growth has only recently caught the eyes of investors.
Photo: simone.brunozzi/Flickr CC

“Amazon captures a tiny share of each category, and if it manages to grab bigger chunks, then it is sitting on a gold mine,” Ovide said. “And that’s before addressing Amazon’s potential to crack additional lucrative areas such as healthcare and advertising.”

Along with Amazon’s climbing value in the stock market, it passed Microsoft to become the No. 3 US company by market capitalization. CEO Jeff Bezos’ net worth increased by more than $39 million in 12 months, making him the world’s rich man with personal wealth estimated at $112 billion.

Some projections earlier this year showed Amazon beating out Apple by a single week.

Morgan Stanley in a note to clients last month predicted Apple would reach $1 trillion thanks, not to iPhones sales, but from services like the App Store, Apple Music, iTunes, and iCloud.

Apple, considered by many to be an undervalued stock, could gain traction with investors as they realize Apple’s value is not wholly dependent on the iPhone.

The 10 percent gap in stock value between Apple and Amazon is still $85 billion and most analysts still see Apple as first to reach the milestone. But as Bloomberg’s Ovide said that given the pace Amazon’s stock value has risen, passing Apple is not impossible.

Source: Bloomberg